International Reset;
updating strategy for the
post crisis landscape
World Trade Week
Irvine Conference
14th May 2015
www.ocoglobal.com
Contents



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
About OCO
Context
US FDI and trade trends
League tables of FDI and trade
Challenges facing US Companies
and EDs
 Building an International
strategy
 Conclusions and Q&A
About OCO
NEW YORK
SEOUL
DUBAI
SAN
JOSE
SHANGHAI
PUNE
MEXICO
CITY
BOGOTA
SAO
PAULO
OCO Office
Partner
Our Clients
National, state, regional and local
economic development organisations
Collaboration with large consulting
firms, delivering economic development
solutions
Private sector clients, including market
research, trade development, company
analytics and corporate location work
FDI Trends Analysis &
US league tables
Context

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



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Resurgent US economic indicators
California renaissance
A successful Select USA Summit- US open for business
Brookings and JPMC raising the bar on Metro ambitions (4 West Coast)
Energy prices and surplus have reset US competitiveness for manufacturing
Incentives narrative evolving to a richer skills and cluster proposition
‘New economy’ investors need more intensive EDO support and embeddingsimilar to export/trade clients
 Internet of things is spurring new sectors and growth of sub-regional
locations and specialists
 Millennials motivated by different employment and lifestyle opportunities
Resurgent US Economy
Unemployment is returning to pre-recession
levels
GDP returning to circa 4% year-on-year growth
14.0
8
12.0
6
10.0
4
8.0
2
6.0
0
4.0
02-03
03-04
04-05
05-06
06-07
07-08
08-09
09-10
10-11
11-12
12-13
2.0
-2
0.0
-4
2005
USA
California
Source: Bureau of Economic Analysis
2006
2007
2008
2009
USA
2010
2011
2012
2013
2014
California
Source: Labor Force Statistics, California Labor market Info
Resurgent US Economy
420
4,700
4,600
410
+10%
+13%
400
4,500
390
Jobs Created
FDI Projects
4,400
4,300
380
370
4,200
360
4,100
350
4,000
340
3,900
330
2009-11
2012-14
The US continues to dominate the FDI landscape with
10% growth in the number of US bound FDI projects
between 2009-11 and 2012-14
Source: fDi Markets
2009-11
2012-14
Growth in projects numbers leading to 13% growth in
the number of jobs created
FDI Trends
FDI into USA 2009 - 2014
The US is the top destination
market for FDI, accounting for
11% of global projects between
2009 and 2014
The Top 10 US source markets
account for 70% of projects into
the US
Average projects from top 10
markets 2009-14: 612 projects
Average Capex from top 10
markets 2009-14: $22bn
FDI Sector Trends
US Share of Top 10 Global Sectors and FDI Propensity
Chemicals & Petrochem
60
Electronics
59
Transportation
Telecomms
58
Advanced Manufacturing
57
High
Business & Professional Services
56
Global FDI Projects
IT & Software
55
Financial Services
54
>10,000
FDI Propensity
53
52
51
5,000 – 9,999
50
49
48
2,500 – 4,999
47
Food & Drink
46
Low
45
< 2,500
44
43
Logistics & Distribution
42
41
40
0%
5%
Low
10%
15%
US Share of Global FDI
20%
High
25%
Top 10 FDI States
Top 10 for Volume of Employment by Foreign Firms
1
2
Top 10 for Volume of Employment by Foreign Firms,
Proportional to Population
3
ME
NH
4
5
6
IN
SC
7
8
10
Source: Bureau of Economic Analysis, 2012
9
HI
Excludes District of Columbia
MA
RI
CT
NJ
DE
But at what cost?
Incentives
Total Incentive Spend
$80.4 billion in 2012
Source: New York Times, 2012
Texas highest with
$19.1bn, South Dakota
lowest with $27.8m
Spend per Capita
Per capita: Alaska highest with
$991, Nevada lowest with $12
Top 10 Export States
Top 10 for Value of Exports
1
4
2
5
Top 10 for Value of Exports, Proportional to
Population
3
VT
ND
WA
MI
6
DE
KY
SC
7
8
9
AK
10
Source: Bureau of Economic Analysis, 2012
Excludes District of Columbia
TX
LA
Building Competitiveness
• Brookings Global cities initiative providing a
programme to build out regional strategies
to boost global trade and investment
• Chosen cities so far span entire US, but
many outside of the traditional FDI and
Trade Top 10 ‘heartlands’
• Challenge now for these cities to begin
implementing their strategies
• AND for other cities to replicate Brookings
type activity
Source: Brookings Institute web-site
Challenges
Changing global environment
New capabilities required
• Emerging economies
• Leveraging social media effectively
• Trade agreements (TTP and T-TIP)
• Maintaining an agile, flexible and effective
overseas network
• Competitiveness (strength of US $)
Multiple priorities and scarce resources
• Keeping your offer/propositions fresh &
compelling and relevant
• Working with the right companies (exporters)
Targeting the right markets
….and factors beyond your control
• Political landscape
• Regulation
• Governor elections
Building a Successful International Strategy
Export Development Cycle
OCO Services
Phases
Process
Client Types
Target
Sources of market knowledge
Free
Almost Free
Not Free
Media/trade press
Company intelligence
Foreign
Trade & Investment
Agencies
Social media networks
Competitor watch
Competitor hires
Agents/Distributors
US Commercial Service
Subscription data
Market visits
Chamber organisations
Seminars
Shipping and
distribution firms
Banks
Consulting firms
Overseas trade shows
Lawyers
Intermediaries
Wrong
Agent/Distributor
People you met on a
plane
Export Readiness Diagnostic
Push V Pull
Push strategy
Pull strategy
•
•
•
•
•
•
•
•
•
•
Smaller/early stage clients
(who need support)
Generalist support
Selling capability/capacity
Focus on geographies and
sectors
Measure inputs and activity
Higher volumes of
transactions
Shorter term cycle
•
•
•
•
More significant clients
Specialist input
More insights and deeper
client relationship
Focus on business
opportunities
Measure outcomes $$$
Lower volume of
transactions
Longer term results
Maximising your marketing $$
Events Campaigns
Its what happens before you get there
that makes the difference
Photos: TOP Governor Rick Scott with Ian King, CEO of BAE System (meeting scheduled by EFI UK);
BOTTOM Governor Rick Scott, Gavin Cleary (OCO) and Manny Mencia (EFI) with Nigel Stein (CEO of
GKN Group), Mike McCann (SVP Business Development of GKN) and Marcus Bryson (President/CEO
GKN Aerospace)
Company Engagement
Pick Winners
Embedding & Expanding
Conclusions
• The most successful regions achieve growth, jobs and prosperity though a combination of
enterprise growth, export sales and attracting foreign investment.
• California’s strength is also its weakness; highly innovative entrepreneurial base, with access
to abundant VC/finance, but high cost base makes it challenging to grow your business, and a
large internal market which may distract from export opportunities
• The old model ED of reactive trade ‘assists’ to companies who participate in missions or
trade programmes is ceding ground to more selective targeting of companies in competitive
sectors that will achieve lasting impact
• To promote FDI, you need to understand your clusters and strategic assets, the same
ingredients for a successful trade and enterprise programme, so there is merit and efficiency
in working together
• The role of US Commercial Service is changing and now encompasses trade and investment
and is under severe capacity constraints overseas
• The most effective government led initiatives tend to involve private sector partnerships and
Chambers of Commerce have a unique and special role in connecting these ambitions
FDI & Export Services
OCO Network
• The OCO network connects
companies with international
opportunities